The post-MiCA regulatory squeeze in the EU crypto market

Stablecoin compliance shifts

The July 1, 2026 deadline for MiCA authorization separates compliant assets from those facing market exclusion. While Circle’s USDC maintains institutional preference, Tether’s USDT counts as a non-authorized e-money token. Major EU exchanges like Coinbase and Kraken delisted USDT throughout 2024 and 2025 because they could not facilitate the acquisition of the asset for the public.

Traders accessing regulated pairs now find deeper liquidity in assets like USDC or PYUSD. You already know that liquidity matters, so the distinction between holding an asset and providing the service to acquire it remains sharp.

Licensing bottlenecks and Binance

The number of active providers plummeted as the transitional period ended. Before the July 1 deadline, nearly 3,000 firms operated under national regimes, but the ESMA interim register only lists roughly 244 valid CASP authorizations. Because the ESMA interim register contains only 244 valid authorizations compared to the nearly 3,000 providers active before the deadline, the regulatory squeeze has effectively removed most smaller, uncoordinated crypto-asset service providers from the European market.

The scale of the licensing bottleneck remains significant. Regulators received far more applications than they expected. Requests for additional information and limited regulatory capacity slowed the entire process. This reality forced many firms to face a much longer planning horizon than the theoretical 65 working days suggested. I see this as a major commercial risk.

Binance provides a stark example of these regulatory hurdles after withdrawing its Greek application on June 24. The exchange suspended new sign-ups and certain services in France, Italy, Poland, and Spain on July 1. While Binance claims it expects to obtain a license through France in the coming months, the exchange still faces the reality of its unauthorized status in other jurisdictions. French prosecutors also investigated Binance’s anti-money laundering procedures and its advertising prior to its registration with the regulator in May 2022. Binance faces legal pressure from the SEC and CFTC in the US regarding the trading of crypto assets and derivatives without appropriate regulatory approval. BitMart also provides a warning, as its trading ended on August 26, 2026, at 01:00 UTC, following an orderly wind-down that requires withdrawal requests by 05:00 UTC that same day.

French enforcement and penalties

France requires all legacy operators to secure full MiCA authorization by June 30, 2026, or exit the market. The AMF notes that 40% of registered firms in France plan to skip the application process entirely, while another 30% simply did not respond to regulatory inquiries. Companies that fail to obtain a license must implement orderly wind-down plans to offload customers. AMF President Marie-Anne Barbat-Layani stated that these plans must be operational, credible, and immediately executable.

Authorities enforce these rules with severe financial consequences. Non-compliant firms face administrative fines of at least €5 million or 5% of annual turnover, whichever is higher. Regulators can also issue cease-and-desist orders or ban operations within the EU entirely. They can also revoke licenses or sanction executives. I find that heavy compliance costs push smaller projects toward jurisdictions like Canada.

The regulatory burden falls primarily on the service provider rather than the merchant. A business accepting crypto for its own goods does not require a MiCA license. While a merchant accepting payment does not require a license, any business that holds user balances or performs conversions for customers falls directly into the CASP perimeter. Can the market absorb the loss of so many service providers without losing liquidity?